Will Akamai Technologies (AKAM) Miss Earnings Estimates? - Analyst Blog

By Zacks Equity Research,

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Akamai Technologies, Inc. ( AKAM ) is set to report first-quarter 2014 results on May 1. Last quarter, the company posted 9.30% positive surprise. Let's see how things are shaping up for this announcement.

Factors This Past Quarter

Robust demand for website and application acceleration solutions, as well as security product offerings and significant traffic growth, are expected to support Akamai's top-line growth in the near term.

We believe that demand for Akamai's cloud infrastructure solutions, media, performance and security solutions will drive revenue growth coupled with its strategic partnerships with Telefonica ( TEF ), AT&T ( T ) , Qualcomm ( QCOM ) and other carriers will boost its CDN services.

Moreover, the strategic acquisitions made by the company would extend its expertise in the cyber security product offering in the non-web applications as well as enterprise data centers.

Nonetheless, pricing pressures due to competition and higher research & development spending could impact margins in the near term.

Earnings Whispers?

Our proven model does not conclusively show that Akamai will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 44 cents. Hence, the difference is 0.00%.

Zacks Rank: Akamai has a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

ON Semiconductor Corp. ( ONNN ) has an Earnings ESP of +6.67% and a Zacks Rank #1 (Strong Buy).

AKAMAI TECH (AKAM): Free Stock Analysis Report

ON SEMICON CORP (ONNN): Free Stock Analysis Report

QUALCOMM INC (QCOM): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

TELEFONICA S.A. (TEF): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: AKAM , ONNN , QCOM , T , TEF

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